Around 38% of all Americans have a side hustle. Many of them have found creative ways to earn a little cash on the side. However, you want to make sure the way you are making money is on the up-and-up. Side hustles have frequently promised that you’ll be able to gain financial freedom or reach your goals simply by working beyond your 9-to-5. That said, these nine side hustles have become increasingly risky and, in some cases, illegal.
You Might Want to Skip These Side Hustles
1. Selling Fake Reviews on Amazon
Writing glowing reviews used to be a quick way for freelancers to pocket extra cash. Businesses paid generously for positive feedback to boost visibility and trust. But Amazon cracked down hard, banning thousands of accounts and suing sellers who violated their policies. The FTC also issued warnings to those promoting deceptive online endorsements. What once seemed like harmless writing is now a shady practice that can get you fined or sued.
2. Airbnb Arbitrage Without Permission
At one point, renting someone else’s property on Airbnb (without owning it) seemed like a genius way to earn passive income. But cities and landlords caught on quickly. Many municipalities now require specific licenses, impose heavy taxes, or ban short-term rentals altogether. Subletting without permission can get you evicted or fined thousands. If your side hustle involves dodging housing rules, it’s not just risky—it’s likely illegal.
3. Dropshipping Knockoff Products
Dropshipping once allowed people to launch online stores without holding inventory. While some sellers built real brands, many profited by pushing counterfeit goods from overseas suppliers. Platforms like Shopify, PayPal, and eBay have since tightened their enforcement policies. Getting caught selling fake branded items can lead to account bans, lawsuits, or customs seizures. If your “side hustle” involves replicas, you’re flirting with trademark law violations.
4. Reselling Concert Tickets Using Bots
Ticket scalping has been around for decades, but the internet took it to another level. People began using bots to snatch up seats and flip them for massive profits. However, new laws like the BOTS Act in the U.S. make this illegal. Violators can face steep fines and even criminal charges. If you’re still playing this game, you’re not hustling—you’re breaking federal law.
5. Driving for Rideshare Services Without Insurance
When Uber and Lyft hit the scene, driving in your free time felt like a smart hustle. But what many didn’t know is that personal car insurance doesn’t cover commercial activity. Accidents while ridesharing can leave you liable for thousands without the proper policy. Some states now require special rideshare insurance, and operating without it may lead to license suspension. It’s no longer just a side hustle—it’s a legal responsibility.
6. Cryptocurrency Pump-and-Dumps
In the early days of crypto, manipulating coin prices was easy and lucrative. Coordinated online groups would “pump” a token’s price, then “dump” it once newcomers invested. Regulators have since stepped in, labeling this practice as market manipulation. The SEC has cracked down on influencers and traders alike. Getting involved in these schemes today can result in investigations or legal action.
7. Selling Homemade Food Without a License
Baking cookies or cooking meals for cash once sounded like a dream side gig. But food safety laws aren’t optional. Most states now require health inspections, kitchen certification, and food handler permits—even for home chefs. Getting caught selling without a license can result in fines or being shut down. Passion is great, but legality matters when you’re feeding the public.
8. Freelance Tax Avoidance
Freelancing on sites like Fiverr or Upwork can be a fantastic way to earn extra income. However, many side hustlers forget—or ignore—tax obligations. The IRS treats self-employment income seriously, and failure to report can lead to audits or penalties. In recent years, reporting requirements for platforms have tightened significantly. “Forgetting” to pay taxes on your freelance gigs is now more dangerous than ever.
9. Reselling Retail Items With Fake Barcodes
Some ambitious resellers once made fast money by swapping barcodes in stores and flipping discounted items online. This scam might sound like a clever loophole, but it’s actually retail fraud. Big box stores have enhanced their tracking systems and routinely prosecute offenders. Getting caught can lead to criminal charges and a permanent ban from stores. If a side hustle involves deception, it’s probably not worth the risk.
From Smart to Suspect: Hustles That Cross the Line
What once passed as clever income hacks are now minefields of legal trouble, shifting policies, and public backlash. Side hustles should provide opportunity—not anxiety, risk, or jail time. As the world changes, so do the rules. It’s crucial to stay informed, keep things ethical, and avoid hustles that could backfire. There’s still plenty of money to be made—just make sure you’re not gambling with your future.
Have you ever tried a side hustle that turned out to be more trouble than it was worth? Share your story in the comments and let’s talk about what to avoid in today’s gig economy.
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